VNU facing shareholder opposition to $7bn IMS Health acquisition
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Analysts are predicting that VNU's planned $7bn takeover of pharmaceutical market research agency IMS Health could be blocked, as opposition to the deal among VNU shareholders mounts.
Investment funds Fidelity, Templeton and Knight Vinke Asset Management have come out against the merger of the world's first and third largest research companies.
Together, the investment firms claim to own 42% of VNU shares. In a research note published earlier this week, JP Morgan analyst Craig Watson said the acquisition was likely to be blocked.
VNU announced in July that it had agreed to buy IMS for $7bn in cash and shares – a price that has been criticised as too high by opponents of the deal.
However, VNU has been working hard to sell the benefits of the merger to its shareholders.
Senior executives of the two companies have previously said they expect to wring $100m in annual cost savings out of the deal by 2008 – and over $30m in the first year alone.
As well as savings in back office functions, such as regional and corporate structures, and IT and production facilities, VNU and IMS believe an extra $150m in revenue can be generated by 2008.
This would be achieved by, among other things, tying pharmaceutical and physician data with retail sales and media ratings data collated by VNU companies ACNielsen and Nielsen Media Research.
VNU spokesman Will Thoretz told the Associated Press: “We continue to believe there are compelling strategic and financial reasons for this merger.”
The companies still have a few months left to convince doubters of the merits of the deal. Shareholders are not expected to vote on the proposals until early next year.
Related links:
VNU and IMS Health in $7bn merger deal
VNU and IMS chiefs flesh-out cost savings of $7bn merger
